Finding Text
Internal Controls over Compliance and Compliance with the Period of Performance Compliance Requirement
See Schedule of Findings and Questioned Costs for chart/table.
Criteria or Specific Requirement: In accordance with §200.309, a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award as required by §200.344(b). When used in connection with a non-Federal entity’s utilization of funds under a Federal award, “obligations” means orders placed for property, services, contracts, and subawards made, and similar transactions during a given period that require payment by the non-Federal entity during the same or a future period as described in §200.71.
Condition: We identified two instances out of 25 sample items selected, whereby expenses were
incurred outside of the award period of performance. These expenses totaled $298 for award AID-
654-A-17-00003 and $99 for award 72069523CA00002.
Questioned Costs: We identified $397 in known questioned costs as a result of our sampling and
testing procedures related to the close-out period of the award.
Context: BDO’s testing of the period of performance compliance requirement was performed by
examining whether the expenses selected as part of our testing of allowable costs and allowable
activities were incurred within the proper period of performance of the award. BDO also performed
specific period of performance procedures on those awards that began or ended during 2024. A total
of 25 samples were selected across the awards that began or ended during 2024. As a result of that
testing two compliance matters were identiifed.
Cause: PSI management has procedures in place to review expenditures to determine the
appropriate period of performance; however, those procedures were not performed to a level of
detail to identify expenses that were incurred outside the period of the award.
Effect: The lack of adherence to the established internal control procedures around the period of
performance of the award resulted in noncompliance and questioned costs that need to be returned
to the U.S. Agency for International Development. Continued noncompliance with federal statutes,
regulations, and the provisions of the award agreements could ultimately result in additional
disallowed costs for the major program.
Repeat Finding: This finding is a repeat finding and was reported as finding 2023-005 in the 2023
schedule of findings and questioned costs.
Recommendation: We recommend management revisit and consider revising their internal
procedures around detecting expenditures incurred outside of the period of performance in order
to prevent the charging of costs outside of the period of performance of the award. Furthermore,
we believe an option would be to close the project within the accounting system, and create a
separate project to accumulate any costs incurred after the end of the period of performance. The
costs incurred subsequent to the end of the period of performance should go through the review
and approval of individuals at PSI Headquarters.
Views of Responsible Officials: PSI management agrees with the finding and recommendations set
forth within and will provide training to appropriate staff responsible for monitoring expenses on
the program. Refer to management’s corrective action plan for additional information.